Triumphing in a Proxy Fight
An electronics company found itself suddenly embroiled in a proxy battle. Leveraging QIC's expertise, the company swiftly responded, garnering substantial backing from foreign investors through strategic board restructuring and proactive engagement. The management's selected candidates received nearly 90% support, cementing their triumph in the proxy contest.
Client Challenge
During the company’s board of directors' election at the shareholder meeting, a dissident director suddenly nominated a slate of candidates before the deadline, alleging management's deficiencies in corporate governance through media channels. Management had to respond to these unfounded allegations within a limited timeframe to demonstrate their commitment to governance and communicate effectively with foreign investors to secure their votes during the election.
The QIC Advantage
Build a Better Board: Drawing on our expertise in proxy advisory firms and foreign investors, we advised the company to replace directors who wouldn't garner recognition and support from foreign investors.
Developing Communication Strategies and Materials: Effective communication with investors is paramount in a proxy fight. We assisted the company in articulating its past operational and governance achievements, future strategies, and goals while addressing the allegations from the dissident. We also described how the nominated board members would lead the company towards sustainable growth.
Engagement with Proxy Advisory and Institutional Investors: Many of the client's major foreign shareholders followed ISS recommendations for voting, but ISS's report contained peculiar suggestions. QIC, along with partners, established direct connections between the company and investors through various channels to maximize investor support.
Results
Obtaining Overwhelming Foreign Support
Despite ISS's unusual voting recommendations, proactive communication with major shareholders helped garner support from investors who typically followed ISS recommendations. Additionally, Glass Lewis fully supported the management's nominated candidates. Ultimately, the management-nominated candidates received nearly 90% support from foreign investors, ensuring the management’s success.
